The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

Name: The above figure shows the market for t-shirts. If the price of t-shirts is $12, then
Brand: Quizplus
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Question

Quizplus · Accepted Answer

At a price of $12, the quantity demanded is only 400 while the quantity supplied is 800. This means there is a surplus of 400 t-shirts in the market. Whenever there is a surplus, sellers have to lower the price in order to get rid of the excess supply. Therefore, the price of t-shirts will fall.

The Above Figure Shows the Market for T-Shirts